May 24, 2015

Bob Schieffer: Let me just start out by asking you, what is a socialist these days? I mean, I remember when a socialist was somebody who wanted to nationalize the railroads and things like that.

Bernie Sanders: When we talk about Democratic socialism, I think it’s important to realize that there are countries around the world like Denmark, Norway, Sweden, Finland, who’ve had social democratic governments on and off for many, many years. And we can learn a whole lot from some of those countries.

Sweden is a funny country to call socialist. In France or Austria the government owns a much larger share of industry, and I would expect that in a socialist country personal income taxes would be low and company taxes high, whereas in Sweden it is the opposite. It has the world’s highest personal income taxes and it’s a tax haven for companies!

–A statement made in 1976 by Rune Hagelund, a member of the board of the Swedish Employers’ Federation (SAF), a former professor of economics, and president and chairman of the board of two of Sweden’s major corporations.

In my freshman year at Bard I was a 16-year-old wet-behind-the-ears libertarian who got schooled by upperclassmen why Sweden’s welfare state was a good thing (from my unpublished memoir):

After being converted to a Camus-styled liberal, I naturally became predisposed to the welfare state and voted for LBJ in 1964 in the expectation that he would govern as a New Deal reformer, which he did for the most part.

When the war in Vietnam began, I radicalized and joined the Trotskyist movement out of a belief in part that the New Deal was a fraud, just something to help keep American capitalism afloat, which was after all FDR’s hope. I never thought much about Sweden in this period except to welcome its socialist Prime Minister Olof Palme as an ally of the antiwar movement. I was also happy to see Swedish material aid to Nicaragua when I was working with Tecnica. So, all in all, Sweden had a much more benign image for me even if I understood it operated on the basis of capitalist property relations.

In 2014, after having read a couple of Stieg Larsson novels and watching Swedish TV adaptation of Marxist detective novels by other writers, I began thinking more deeply about the Swedish model. It was these writers focus on the corporate/fascist presence that motivated me primarily but I always wondered in the back of my mind how Sweden became such a success story, at least enough of one to allow Bernie Sanders to embrace it unabashedly.

In writing about the ultraright, I discovered that Sweden had a chummy relationship with Nazi Germany during WWII. I didn’t realize at the time I was exposing this relationship in a CounterPunch article that it was the Social Democrats who were in power, not some rightwing party. Prime Minister Per Albin Hansson advocated a national front that included all the parties except for the CP.

While the image we have of Sweden is one of resistance to Nazism, based on the country providing a haven for Jews and Raul Wallenberg’s efforts on behalf of Hungarian Jews, it is worth noting that the Wallenbergs—arguably the most powerful capitalist family in Sweden—were capable of cutting deals with the Nazis after the fashion of the socialist Prime Minister as an article in a Bay Area Jewish newspaper reported:

The Wallenberg documents shed light on “Sweden’s involvement with and collaboration with the Nazis during the war,” Steinberg said.

“Sweden is clearly emerging as one of the places where the Nazis moved assets.”

According to the documents, The Enskilda Bank, owned by Jacob and Marcus Wallenberg, Raoul’s uncles, dealt in large black-market operations, money laundering and concealing German investments in the United States.

The documents also contain evidence disproving the belief in some circles that Marcus Wallenberg was on the side of the Allies. He traveled to the United States in 1940 on behalf of German interests to buy back a block of German securities being held by America, according to the documents.

The disclosed information about the collaboration between the Nazi regime and Marcus and Jacob Wallenberg suggests a reason for the feeble attempt to find their nephew.

“It’s long been out there that the Wallenberg family in Stockholm apparently did very little to locate Raoul after his disappearance into the Soviet gulag in January 1945,” Steinberg said.

Perhaps the main reason Sweden has such an elevated status is its ostensible commitment to the welfare state. In a period of deepening austerity, the fact that there was a nation like Sweden that apparently departed from the neoliberal model for well over a half-century had a tendency to mesmerize Bernie Sanders and allow the more Marxist-minded members of the left to cut it some slack.

In this, the first in a series of articles on Sweden, I hope to convince the left to think more critically about the Swedish model if for no other reason than to put Bernie Sanders socialism into some kind of context.

The first place to start is with some discussion about the real origins of the welfare state, which was not in 20th century Sweden (or the USA for that matter) but under Bismarck’s Germany.

For the best appraisal of Bismarck’s “state-socialism”, the term that the Lassalleans would apply to his regime, I recommend the chapter in volume four of Hal Draper’s “Karl Marx’s Theory of Revolution” titled “Of State-Socialism”: Bismarckian Model”. Draper writes:

Bismarck was too shrewd to depend only on the policeman’s club. The stick to the donkey’s rear had to be supplemented by the carrot dangled in front.5 In the course of the 1880s Bismarck brought out a whole bunch of carrots. Familiar to us now, they then looked revolutionary to many: a series of social-welfare measures providing for accidents, illness, old age, and other workers’ disabilities.

Bismarck’s first proposal, for insurance against industrial accident. came in 1881 and was defeated in the Reichstag by the bourgeois parties. After all, Bismarck’s aim was not only to isolate the working class from the socialists but also to mobilize a “bodyguard proletariat” of its own i order to dish the liberal bourgeoisie and its demands for constitutional liberties, its aspirations for bourgeois dominance in the government and the weakening of absolutism. The new measures being proposed by the Bismarck government were going to be paid for by the class that was the government’s main target. The proletariat was not only supposed to come all over grateful to the state but also to turn antagonistic to the state’s main political opposition, the Liberals or “Progressive party.” But the bourgeois liberal deputies could not resist very long, in this as in anything else.

In 1883 a Sickness Insurance Act was passed, with the workers contributing only a third of the cost. In 1884 an Accident Insurance Law followed, with costs borne by employers alone. In 1889 an Old Age and Disability measure was adopted. In 1903 came a code of factory legislation, with a system of labor exchanges to promote employment. Many of these mea- sures were the first of their kind in the world; by the time of the world war Germany had become the model land of advanced social legislation, under the pressure of the absolutist state, not the bourgeoisie. (However, unemployment insurance was never passed; it took a revolution to achieve this reform under the Weimar Republic.) There was a connection between this beneficent program and the coming world war, for Bismarck’s social strategy had still another side: it was intended to ensure internal unity and class peace while the state intensified an aggressive foreign policy of colonialism and foreign-market penetration, thereby compensating the bourgeoisie (at least its upper reaches) for its social-welfare expenses. This foreign policy was also going to drive a wedge between the right wing and left wing of the Social-Democratic Party, but we will see only the beginning of this process before this chapter ends. In part to finance the technological substructure for war, Bismarck introduced another installment of “socialism”: a state tobacco monopoly in 1882 (a big source of revenue) and the nationalization of the railways. Here was something that began to really look like socialism to many people; at any rate, it was a definite intervention by the state into the economy, even if on a small scale.

As I will point out in my next post, the Swedish bourgeoisie and its partners in the social democracy had pretty much the same agenda.

October 6, 2014

Karl Marx in the offices of The Neue Rheinische Zeitung: Organ der Demokratie (“New Rhenish Newspaper: Organ of Democracy“), a German daily newspaper he published between June 1, 1848 and May 19 1849.

Four days ago I received a query from a Latin American journalist:

Dear Louis:

I am an editor at a leading newspaper in Quito, Ecuador, and I will like to make a you one question (if you agree of course) for an article I am trying to write, after the international leftist meeting that was held this week here in this city.

My piece is about, how is it that the new and modern left is so tolerant with authoritarian regimes. Castro, Chávez and even Correa have been very sympathetic with leaders such as Lukashenko, Mugabe and Kaddafi.

So my question is if you think that this is part of a stalinist legacy that has not been thrown away by the left, despise all the horrors that the stalinist regime was responsible for?

All the best

Since others might have the same sorts of questions, I am posting a public response as follows.

This is a very complex question. To start with, Hugo Chavez is something of a paradox on the question of democracy. Keep in mind that the entire premise of “21st Century Socialism” rested on the assumption that Stalinism tainted the 20th century version. In a speech to the World Social Forum in 2005, Chavez stated that “We have to re-invent socialism. It can’t be the kind of socialism that we saw in the Soviet Union, but it will emerge as we develop new systems that are built on cooperation, not competition.” On the other hand, in the very same speech he said, “Today’s Russia is not Yeltsin’s… there is new Russian nationalism, and I have seen it in the streets of Moscow… there is a good president, Mr. Putin, at the wheel.”

That, in a nutshell, is the contradiction we see on the left. There is acknowledgement, at least verbally, that Stalinism was unviable. If you keep people repressed there is always a tendency for them to do as little as possible to keep the system going and to look for ways to game it. Stalinist societies rot from within. Even if there is pressure from imperialism, the bigger threat is always the spiritual and psychological disaffection of workers and farmers.

But what good does it do for Chavez to make this observation while at the same time nodding in approval of Vladimir Putin? It is obvious that there would be an affinity with Putin since he superficially had the same agenda as Chavez, namely to use the revenue from petro-exports to improve the conditions of life for the average citizen. Keep in mind that toward the end of his life, Chavez had moved away from the notion of building socialism entirely. His model was less and less based on what are commonly referred to as “communist” states but Western European social democracies, which are simply welfare states resting on capitalist property relations. So naturally he would tend to see all petroleum exporting states with a populist but repressive regime and enemies of his own enemy—the USA—as partners. This meant that Russia, Iran, Libya and Syria were hailed in the Venezuelan press as forward-looking societies even though their jails were filled with political prisoners.

You are absolutely right to understand this as rooted in Stalinism. The belief that socialism could be built in a single country was in contradiction to the core Marxist belief that socialism had to be built on a global scale, just as was the case with the social system that preceded it: capitalism. Despite the fact that the USSR was an enormous country with all of the resources advanced industry would require, Leon Trotsky warned that the system would collapse unless revolutions triumphed in Western Europe: “But how far can the socialist policy of the working class be applied in the economic conditions of Russia? We can say one thing with certainty–that it will come up against obstacles much sooner than it will stumble over the technical backwardness of the country. Without the direct State support of the European proletariat the working class of Russia cannot remain in power and convert its temporary domination into a lasting socialistic dictatorship.” (I should add that Trotsky used the term “dictatorship” in the technical Marxist sense of a particular class dominating the state rather than what exists in Zimbabwe et al.)

With Trotsky’s defeat, the USSR tended to see other countries less as candidates for social transformation and more as potential allies for “socialist development”. If there was a clash between the workers in a capitalist country and their rulers who were seen as favoring Soviet interests, the workers got short shrift. When Greek workers took up arms against a fascist dictatorship, Stalin decided to sell the workers out rather than jeopardize the friendly relations he had with FDR, who was amenable to allowing Eastern Europe to become a “buffer” against invasion. This was not a socialist foreign policy but a global chess game in which a struggling people were sacrificed as a pawn.

This is the same thing that is happening today even though capitalism has returned to Russia. It would probably make more sense to speak of neo-Stalinism since Vladimir Putin would be the last person on earth to favor a socialist Russia. If Stalin saw Ukraine as a kind of outpost dedicated to the defense of the USSR, not much has changed under Putin, except that the social relations being defended are based on private property rather than state ownership. Hitler invaded Russia in order to smash collective ownership while the West never had any such intentions. Why would it if Exxon is invited in as a partner in some of the biggest oil exploration deals in history, including drilling in the most ecologically sensitive areas?

It is understandable why some on the left would be anxious to smear every protest movement in the Russia/China orbit as an imperialist plot. There is ample evidence that Washington will exploit every movement to see its own agenda advanced. When I was involved with Nicaragua solidarity in the 1980s, I was incensed about reports that the NED was funding parties opposed to the FSLN. That explains why some are so anxious to write off the Hong Kong protesters as tools of the USA. But revolutionary politics is not based on algebraic formulas. You have to be able to understand that sometimes X can be equal to Y and not equal at the same time. In other words, Hegel is a better guide to social reality than Aristotle, the father of formal logic.

In places like Syria, Ukraine, Libya, Zimbabwe, Iran and Russia, the protest movements have both progressive and reactionary tendencies. To some extent, this is a function of the socialist left having lost its moral authority. In Ukraine, with the CP being an unabashed supporter of Russian domination, is it any wonder that ordinary people topple Lenin statues? Those statues, I should add, never had much to do with defending socialism. They were like George Washington statues in American parks, empty symbols of national sovereignty.

Very often when people begin fighting for freedom, they bring certain prejudices along with them. Although it would be best if a social movement had a crystal-clear agenda based on a combination of Enlightenment and socialist values, there is often a mixture of past, present and future that can be confusing to the onlooker. For example, there are many Syrians who have fought against the Baathist dictatorship who are for Sharia courts, a symbol to many on the left of a feudal past. But when you keep in mind that the judicial system in Syria was rigged to favor the Baathists, the temptations of Sharia law become more understandable. When the Irish rose up against British colonialism during WWI, the same kind of confusion cropped up on the Marxist left. Why support a movement that seemed to be tainted by Catholic dogma? Lenin tried to answer this question in an article titled “The Irish Rebellion of 1916″:

To imagine that social revolution is conceivable without revolts by small nations in the colonies and in Europe, without revolutionary outbursts by a section of the petty bourgeoisie without all its prejudices, without a movement of the politically non-conscious proletarian and semi-proletarian masses against oppression by the landowners, the church, and the monarchy, against national oppression, etc.–to imagine all this is to repudiate social revolution. So one army lines up in one place and says, “We are for socialism”, and another, somewhere else and says, “We are for imperialism”, and that will be a social revolution! Only those who hold such a ridiculously pedantic view would vilify the Irish rebellion by calling it a “putsch”.

It is regrettable that so few on the left can understand many grass roots movement today in the same light.

In order for the left to regain its moral authority, it has to once and for all stop functioning like the CP did in the 1930s, least of all when Russia and its allies lack even the economic justification that once existed for that type of “border guard” stance. Unless socialism and socialist politics are once again synonymous with democracy, the left will have nothing to say to young people fighting for social change.

When you stop and think about, Marx and Engels entered politics in the same spirit as the Syrians who marched in the streets of Homs and Aleppo in early 2011 for an end to a system that used torture and murder to enforce neoliberal rule. They were deeply involved with the movements for democracy in 1848 that challenged the old feudal order, the counterpart to Baathist rule in those days.

August Nimtz, an American scholar, wrote a book titled “Marx and Engels: Their Contribution to the Democratic Breakthrough” that reaffirmed their commitment to democracy that has unfortunately been forgotten by much of the left. In an interview with Socialist Project this year, Nimtz explained what his goals were in writing such a book:

As you probably know from my writings, I prefer to let Marx and Engels speak for themselves. And for this question there’s no better place to begin with than their Manifesto of the Communist Party, a document that sharply distinguished itself from the programmatic stances of other socialist tendencies in its position that the prerequisite for the socialist revolution was the democratic revolution—the necessity “to win the battle for democracy.” In related pronouncements clarifying their views they wrote that, like the Chartists in England, the German proletariat “can and must accept the bourgeois revolution as a precondition for the workers’ revolution. However, they cannot for a moment accept it as their ultimate goal.” And in no uncertain terms the Manifesto, in four successive locations, made clear that it would take “force” to “overthrow the bourgeoisie” in order to reach the “ultimate goal”. Nevertheless, they maintained to the end that the means to that goal was the conquest of the “bourgeois revolution.” When a critic charged in 1892 that they ignored forms of democratic governance, Engels demurred: “Marx and I, for forty years, repeated ad nauseam that for us the democratic republic is the only political form in which the struggle between the working class and the capitalist class can first be universalized and then culminate in the decisive victory of the proletariat.”

Ultimately, this statement might serve as a litmus test for the left. Although I am too old to get involved with organizing a movement, this pro-democracy orientation would be at its core. I have not only seen the USSR collapse because of dictatorship, I have also seen the socialist organization I belonged to for more than a decade collapse as well. The right to speak freely and act freely is as natural as breathing. When it is taken away, we suffocate, as does society. Ultimately, as Nimtz points out, democracy is a means to an end: the creation of a new world based on a just and rational economic order. Anything that stands in the way has to be rejected. It is not even a problem if this is a minority viewpoint today because in the long run it is the only one that can succeed.

July 8, 2014

Recently a correspondent posed some questions to me that I would like to respond to publicly since others might get something out of my response.

Q: “How would a socialist system account for jobs that don’t occur on property? Or small businesses that adhere to the service industry where minuscule amounts of profit comes from labor time as opposed to capital investment? i.e., I get paid $22 per hour / 89.50 labor rate. 60 otherwise goes overhead. And I sell the parts my boss invests in with his capital.”

I’ve been faced with this question and I’m unsure how to respond; what is a fairly short explanation of how a social system based on workplace democracy would replace this? What’s the socialist solution to this problem?

A: In general, I shy away from questions about how a future socialist system will work but in the Russian revolution the original intent was to only expropriate the big capitalists. In the immediate period, however, a policy of War Communism led to the expropriation of all privately owned firms, large and small. This was a function more of the need to disempower a middle class that was hostile to the revolution rather than comply with any socialist blueprint—which of course Marx never intended to begin with.

Once the civil war ended, War Communism was abandoned. From that point on, large enterprises remained collectivized but small to medium sized peasants were given a lot of leeway—similar to the experiment taking place in Cuba today. Cuba adopted something similar to War Communism in its early years but this was a function more of the prevailing understanding of what “socialism” was about in 1960 than anything else. It really made no sense to expropriate small hotels, restaurants, retail shops and the like.

I am not exactly sure I get the drift of you math but in a way it is beside the point. If the American working class ever seizes control of Exxon, IBM, Chase, GM, Pfizer, Monsanto et al, it will be absolutely unnecessary to take over small enterprises. The important thing to understand is that unlike a pizza parlor or a nail-polishing shoppe, Exxon and Monsanto have enormous social and economic power. Negligence by Exxon destroyed wildlife in Alaska for a generation. Monsanto’s drive to make GM hegemonic will lead to huge risks for the ecosphere. These are our big concerns not whether a bike shop or a frozen yogurt shop adheres to the labor theory of value.

Q: Hello, I’m getting ready for a debate on Marxism and my opponent has in the past pointed out that value is in fact subjective. I may value a pot at $100 yet he may value it at $50. If it is true that Labor determines the value of this pot, how do I argue against the Subjective Theory of Value?

I myself do not possess too much of an understanding of the Labor Theory, and most attempts at reading long articles do little to advance my knowledge. If I’m understanding the Labor Theory wrong, can you give me a simple explanation of it devoid of confusing rhetoric and such?

Thanks a lot.

A: This is a variation I have heard on arguments against the labor theory of value that involve art, which in a way a pot can be seen as. For example, how does a painting by a well-established abstract artist command prices of a million dollars when it was executed in a day while a landscape by a mediocre artist that took a year to paint is valued at $1000?

Marx was far more concerned to explain the pricing of more mundane items like a yard of cotton textiles, which do not involve taste or training. Capitalist production does not involve esthetics. Steel production, mining, manufacturing, rail transportation, etc. all revolve around basic commodities and services that can be produced anywhere. That is why offshoring has become such a powerful weapon in the hands of the bourgeoisie. There was a book review recently in the NY Times (http://www.nytimes.com/2014/07/06/business/a-game-of-chairs-and-globalization.html) that takes a close look at what takes place with the Bassett furniture company:

There are superb scenes in which Mr. Bassett’s son, and then Mr. Bassett himself, go in search of the Louis Philippe, finally finding it being made in a grim plant in a remote corner of northeast China near the North Korean border. Their quest climaxes when Mr. Bassett meets face to face with the owner, who is planning a mammoth factory complex that threatens to eradicate what remains of the American industry. Mr. Bassett is coldly informed that the only way Vaughan-Bassett can survive is to shut its factories and sell Chinese furniture.

The furniture company managed to resist offshoring but the overall prospects for that kind of manufacturing is grim.

Another book that I would strongly recommend is “Capital Moves: RCA’s Seventy-year Quest for Cheap Labor” by Jefferson Cowie that I read when it came out in 1999. Much of it can be read online:

I should add that the labor theory of value is best understood as a way of understanding the class relationships between worker and boss rather than as a way of pricing commodities—although a couple of British economists have written extensively about how computers would make such a thing possible under socialism: http://users.wfu.edu/cottrell/eea97.pdf. It is very technical, I’m afraid.

In an e-mail discussion, Brad deLong of U.C.-Berkeley economics wrote that: “The LTV [labor theory of value] is not true: average market prices are not labor values, and the deviations of the average prices of particular commodities from their labor values are not simple redistributions of ‘surplus value’ from boss to boss…. “

It’s hard to say that Marx’s “labor theory of value” is “not true” if one doesn’t understand it, just as it’s hard to say that it’s “true” if one doesn’t understand it. In fact, there are a lot of questions about what “it” is. In fact, it’s unclear what to call “it.” Below, I present one interpretation of the “LTV” which I hope will make these questions clear, allowing us to move on to other issues.

I’ve had several fast food jobs. I’ll never forget my first. I was 19 and I flipped burgers at Gino’s (a competitor of McDonald’s) in 1975 in the suburbs of Philadelphia. I was earning money for college. Ginos advertised “flexible hours” to cater to college student’s busy needs. I signed on at $1.90 an hour, plus one free hamburger per shift.

One day I was called in at the last minute for an evening shift of four hours. Not owning a car, I took public transportation to the place, about 4 miles away, for the 4:00 shift. It started to rain. When I arrived, soaking wet at 4:00, I was told, ‘we don’t need you anymore tonight, Brian.

“But it took an hour to get here and I want to work. Please let me do something.”

“Can’t you see?” the manager pointed out the window, “it’s raining out, hard, and no one is coming into Ginos. We don’t need you. Can you work a shift on Saturday at 11:00 to 2:00?”

“Can I at least have my hamburger?”

“But you didn’t work!” he said.

Needless to say, those bastards at McDonald’s and Ginos will be on the expropriation block the day after the workers seize power.

April 19, 2014

Hello, I am a young Marxist, and I have a question regarding production. In a Socialism, Utopian and Scientific, Engels stated:

“The modern state, no matter what its form, is essentially a capitalist machine, the state of the capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of the productive forces, the more does it actually become the national capitalist, the more citizens does it exploit. The workers remain wage workers – proletarians. The capitalist relationship is not done away with. It is rather brought to a head. But, brought to a head, it topples over. State ownership of productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.” –Engels.

From what I take from this, State Ownership was only advocated to further develop productive forces to make way for socialism. But in the Manifesto, it called for Nationalization of productive forces. However, this is now redundant because production is already built up.

So my question is this: if state ownership of industry is not socialist; what is? Would it be a decentralized planned economy run by the workers through worker councils? If so; how would this operate and how would planning go about? Without planning, we slip back into the chaotic production of capitalism; only this time it’s worker owned. Would the state own land and workers exercise workplace democracy on it?

As for communism (which obviously has no state to direct planning), can you also describe the economic system it would operate on?

I am very confused about this subject, and I’d like to understand it better.

Since many other people might have the same kinds of questions, I am going to reply publicly.

Essentially Engels is writing about trusts, joint-stock companies—the monopoly capitalism that Lenin wrote about in his “latest stage” pamphlet, prompted by the outbreak of WWI. One can imagine that it was possible to see only the plus side of monopolies in 1880, when Engels wrote Socialism, Utopian and Scientific. They were “transitional forms” that would lend themselves to socialist planning. In fact you can see the same kinds of enthusiasm in Edward Bellamy’s “Looking Backward”, written in 1889 and inspired by the early development of large-scale department stores and technological breakthroughs made possible by monopoly production. He even writes of “the nation” being “the sole employer and capitalist”.

I am not quite sure what exactly is the nature of the “state ownership” that Engels is referring to, however. To my knowledge, most of the big trusts were privately owned—such as Standard Oil or Carnegie steel works. There is a good chance that Engels was referring to developments in the future.

Later on the term “state capitalism” became more familiar in the lexicon of the Russian Communist Party. In Bukharin and Preobrazhensky’s The ABC of Communism, the term does not mean that the state has taken ownership of production but that the monopoly capitalists have taken over ownership of the government. They write:

Thus in the end we arrive at the following picture. The industry of the whole country is united into syndicates, trusts, and combined enterprises. All these are united by banks. At the head of the whole economic life there is a small group of great bankers who administer industry in its entirety. The governmental authority simply fulfils the will of these bankers and trust magnates.

In other words, John D. Rockefeller, Andrew Carnegie and J.P. Morgan never lost ownership of their empires. Instead they took over ownership of the state.

You also find a reference to state capitalism in Lenin’s writings on the NEP, where the Soviet government allowed a certain amount of market relations to help revive a war-ravaged economy. In 1922 you can find a section of an article on the NEP titled

State Capitalism In The Proletarian State And The Trade Unions that states:

The proletarian state may, without changing its own nature, permit freedom to trade and the development of capitalism only within certain bounds, and only on the condition that the state regulates (supervises, controls, determines the forms and methods of, etc.) private trade and private capitalism. The success of such regulation will depend not only on the state authorities but also, and to a larger extent, on the degree of maturity of the proletariat and of the masses of the working people generally, on their cultural level, etc. But even if this regulation is completely successful, the antagonism of class interests between labour and capital will certainly remain.

What Lenin was describing might be compared to the experiments that Cuba has been making with foreign-owned hotels, privately owned restaurants, etc. They can best be described as pockets of production for profit in a society that has broken with profit as the ruling principle of the economy. On the other hand, it has little to do with China where capitalism is so widespread that even the state-owned enterprises operate on the same basis as the factories owned by Apple, et al. For profit and only for profit.

Perhaps the best example of state-owned enterprises in the more recent past in the capitalist world are those that flourished under fascism. For example, Volkswagen was formed in 1937 by the Nazi trade union. You also have state ownership in a capitalist country when it is critical to the capitalist economy as a whole. Airlines and other transportations systems fall within this rubric. Finally, you see plenty of it in third world countries that have just liberated themselves from imperialism but have not had a chance to develop a native bourgeoisie. My Turkish professor at Columbia University once quipped that the state owned more companies under Mustafa Kemal than were owned in Stalin’s Russia. He was exaggerating but not by much.

You referred to the call for nationalization in the Communist Manifesto. I am not exactly sure what that is a reference to. By and large, Marx tended not to lay down rules for how socialism would be built. In chapter two of the CM, there are demands put forward, including one that calls for “Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan.” That’s really about it. Keeping in mind that the CM was written in 1848, the main political concerns of Marx and Engels was how to rid Europe of the feudal restraints on production and to create the conditions for the emergence of working class power in a democratic framework—in other words, pretty much the same goals as Lenin in 1905 or so.

This leads me to the big questions you raise:

So my question is this: if state ownership of industry is not socialist; what is? Would it be a decentralized planned economy run by the workers through worker councils? If so; how would this operate and how would planning go about? Without planning, we slip back into the chaotic production of capitalism; only this time it’s worker owned. Would the state own land and workers exercise workplace democracy on it?

As for communism (which obviously has no state to direct planning), can you also describe the economic system it would operate on?

To get to the last question first, I don’t see any difference between socialism and communism. In fact, Marx and Engels used the terms interchangeably. Years later, and especially under the influence of Stalin, socialism became an intermediate stage between capitalism and communism but there is no basis for that in Marx’s writings.

As to how socialism would operate, I confess that I have not written much about that over the years. My emphasis is on how given post-capitalist societies function, with a particular emphasis on Cuba. I recommend this piece in particular: http://www.columbia.edu/~lnp3/mydocs/state_and_revolution/cuba.htm. It was written primarily to answer a member of the British SWP, a group that believes that the USSR was “state capitalist” but not even in the sense of what Lenin wrote above. It saw no particular connection between the Soviet economy and the Marxist project despite the lack of a profit motive in production.

I do strongly recommend that you look at the writings of Michael Lebowitz, an economist living in Venezuela, who has written many articles and a number of books on exactly the questions you posed. It was he, in fact, who convinced me that the distinction between socialism and communism was a bogus one. I have reviewed a couple of his books that you might find useful. Here’s an excerpt from my review of his “The Socialist Alternative”:

Although The Socialist Alternative is very much about conceiving how a future socialist system might function, it wisely avoids the neo-utopian parecon of Michael Albert and Robin Hahnel. As Marx said in an 1873 afterword to volume one of Capital, he was not interested in writing recipes for the cookbooks of the future. Given the catastrophic tendencies of global capitalism, however, a socialist alternative is clearly on the agenda.

For Lebowitz, the goal is what he has dubbed the “socialist triangle,” consisting of:

1. Social ownership of the means of production. It is, of course, not the same thing as state ownership since that has led to a kind of class differentiation exploited by bureaucrats in the Soviet model.

2. Social production organized by workers. This is an attempt to eradicate the distinction between intellectual and manual labor in the plants and offices of the capitalist system, a social relationship that tends to breed apathy and resentment.

3. Satisfaction of communal needs. This breaks with the paradigm of the individualist consumer and stresses the need for a collective definition of social needs. Without democracy, of course, this would be impossible.

In breaking with Leninist orthodoxy, Lebowitz rejects the distinction between socialism and communism. Lenin conceived of socialism as the first stage of communism, but Lebowitz finds no support for this in Marx. He also makes what I think is an essential point:

The term communism communicated something different when Marx wrote in the nineteenth century. Communism was the name Marx used to describe the society of free and associated producers — “an association of free men, working with the means of production held in common, and expending their many different forms of labour-power in full self-awareness as one single social labour force.” But very few people think of communism that way now. In fact, people hardly think of communism as an economic system, as a way in which producers organize to produce for the needs of all! Rather, as the result of the understanding of the experiences of the last century, communism is now viewed as a political system — in particular, as a state that stands over and above society and oppresses working people.

First of all, Capital is written from the perspective of an alternative society, the inverse situation in which the products of society serve what Marx called “the worker’s own need for development.” I think the struggle for human needs, for the satisfaction of needs is not simply giving people gifts, but it is a whole process of people having the power to work together in the communities to produce for communal needs and communal purposes. That is the revolutionary demand and struggle. For those people who say “well, that’s communism (a utopian society), but socialism has a different principle—to each according to their contribution,” I say that’s a distortion of Marx. Marx didn’t have two stages: socialism and communism. Marx had one society which comes on to the scene defective initially because it inherits all these defects from the old society. But developing that new society cannot be carried on by building on those defects. That argument goes back to Lenin, who argued that until people are highly developed, we have to have the state control where they work, how much they get, and the “socialist principle” is to each according to his contribution. But the tendency to want an equivalent for everything you do is the defect inherited from the old world. That’s what you have to struggle against, not build upon. And it obviously can’t happen overnight. Because people culturally don’t immediately accept it. But you have to say “this is the goal.” How will we proceed to build that goal? And you can’t put off this ideological and practical struggle until a distant stage. We have to build socialist human beings while developing new productive forces—a point that Che made so eloquently.

They didn’t do that in the Soviet Union. They had a focus there on self-interest (bonuses in that case), and the same was true in Yugoslavia. Unfortunately, the same pattern is emerging in Cuba—a growing emphasis on how “we can’t have distribution of subsidized food, we can’t have cheap electricity, we can’t have all this inefficiency, it’s waste, etc.” These are things that have been part of the revolution which are now being rejected. The perspective reflects in general the idea that these are things for a higher stage (and it is not the only thing put off to a later stage—e.g., there’s worker management). I think that is a very unfortunate tendency which is going along with a re-emphasis upon distribution according to contribution. However, the whole concept of a separate stage of socialism and a separate stage of communism has been the way in which a principle alien to Marxism was introduced. Building on selfishness which is what distribution in accordance with contribution is (“I will give you this only if you give me that”) is not building anything except building the basis of return to capitalism.

Shenk’s article is a survey of Jacobin Magazine and three books. One is Piketty’s “Capital in the 21st Century”, ordered from Amazon two weeks ago. Apparently it is back-ordered, a propitious sign given its sweeping indictment of the capitalist system. I know vanishingly little about Piketty’s analysis except that he does not care much for Marx, according to Doug Henwood whose word on such matters I trust implicitly. The other two books are written by N+1 editors, Nikil Saval’s “A Secret History of the Workplace”, a work that examines cubicles and the like, and Benjamin Kunkel’s “Utopia or Bust”.

Shenk is a doctoral student at Columbia University who somehow managed to write a biography of Maurice Dobb in his spare time, no mean feat. For those of you unfamiliar with Dobb, a word or two should suffice. He was a British CP’er who wrote a book on the history of capitalism titled “Studies in the Development of Capitalism” that I highly recommend. Dobb took part in a debate with Paul Sweezy in the 1950s defending a somewhat Anglocentric analysis that put the emphasis on primitive accumulation in the countryside as opposed to the expansion of global trade—Sweezy’s perspective. But unlike Robert Brenner, who took up the cudgel against Sweezy later on, Dobb stated that colonization and slavery was also essential.

It is rather unusual for The Nation to publish such a long article so focused on Marxist theory. The standard fare there is something about the nefarious Koch brothers or the need to hold Obama to his promises, etc. In the back of my mind I wondered if The Nation ever got over Jacobin editor’s Bhaskar Sunkara’s Letter to ‘The Nation’ From a Young Radical, a piece that can best be described as biting the hand that feeds it.

Shenk starts off with an observation that probably looms more importantly in his own mind than in the general left public, namely that Karl Marx preferred to use the term “capitalist mode of production” rather than capitalism. This distinction strikes me as more semantic than theoretical but if it is important to the author, why quibble?

Much more serious is our author’s contention that ”All…socialists needed to seal their victory was a revolution, which capitalism’s contradictions would deliver to them.” In reality, Marx and Engels thought that the tasks were far more challenging. In Critique of the Gotha Programme, Marx writes: “What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges.” Doesn’t that sound like the conditions that have prevailed in every post-revolutionary society over the past 100 years or so? If Marx was referring to a heavily industrialized country like England, where he expected the revolution to occur, what could he possibly have thought about Cuba’s prospects? Shenk talks about capitalist contradictions delivering a revolution like Pizza Hut, when in fact it is after the triumph of the people that the hard work really begins. I say that as someone who was deeply involved with providing technical aid to Nicaragua in the late 80s.

After another thousand words or so on the history of the use of the term capitalism, a word that had lost its sting in the prosperous 50s and 60s except among the hard-core Marxist left, Shenk zeroes in on the ostensible purpose of his review, which is to evaluate the magazines and books under consideration.

For Shenk, the new generation of Marxists such as the Jacobin and N+1 editors made the transition from college to the revolutionary cause rather seamlessly, aided by social media:

Many had just left college, carrying with them fresh memories of an academic world that doubles as Marxism’s heartiest stronghold…The commitment was lighter, but easier to share, maybe with a post on Facebook.

Yes, I quite understand. Most of my Marxist FB friends will regale me with a singing dog Youtube clip one day and a status post the next about a David Harvey lecture the next. This is not exactly the sort of thing that will get you an FBI file but neither will this, I suppose.

After some more excursions (was The Nation paying him by the word?), Shenk finally gets down to brass tacks:

Cloaked in the moral authority of Occupy and connected by networks stitched together during those hectic days in 2011, a contingent of young journalists speaking through venues both new and old, all of them based in New York City—Jacobin, n+1, Dissent and occasionally this magazine, among others—have begun to make careers as Marxist intellectuals.

When Shenk had earlier referred to Marx as a descendant of rabbis who never fancied himself the leader of a religion, the subtle implication was that this was exactly had transpired—socialism as a secular religion. Given that line of thought, it of course logically leads to the conclusion that “cloaked in moral authority” is a jab at the people under consideration who Shenk wants to cut down to size as bible-thumpers–the holy book being Capital:

Combine all this with some fondness for navel gazing and with the fortunes of geography—politics aside, New York writers are New York writers, and they like to talk about each other—and the pieces are in place for the articles declaring the rebirth of Marxism that have become a minor genre in the last year. Like a puffer fish temporarily ballooning to vastly larger sizes, the Marxist revival can seem more imposing than it is. For a certain type of reader, however, it’s easy to forget the illusion when there are so many withering tweets to skim.

As an example of the puffer fish inflating itself, Shenk refers to a Jacobin editorial in 2011 that blasted the Obama administration for seeking to roll back the New Deal and Great Society, a claim he felt was “clear to almost nobody anywhere.” Hmm. Now I am beginning to understand why The Nation would put down the red carpet for him. Melissa Harris-Perry could not have been more scornful of such puffer fish impudence.

Turning to the books under review, Shenk dismisses Saval’s work as breaking little new intellectual ground. Since I only know Saval’s analysis from an excerpt in “Harpers”, I will defer commenting on whether it does or doesn’t.

Shenk is more generous to Kunkel’s “Utopia or Bust”, a book that he describes as “playful and unfailingly lucid”. When one hand giveth, the other taketh away, however:

Precisely because of its clarity, however, Utopia or Bust reveals some of the more peculiar aspects of a group that can seem more inclined to recite Marx than to rethink Marxism, or move beyond it.

Shenk regards Kunkel’s reference to a “near unchallenged global capitalism” as a “fixation”, something I suppose that’s akin to a neurotic obsession. Since Shenk regards “investments gushing in from China today” as an exception to global capitalism, I suppose I’ll have to count myself among the neurotically obsessed.

As I stated earlier, I have not yet read Piketty’s book so I am no position to weigh his Shenk’s critique. That being said, I do have to wonder about his characterization:

Though not a Marxist, Piketty is firmly of the left. A supporter of France’s Socialist Party, he has said that he “dream[s] of a rational and peaceful overcoming of capitalism.”

I am not sure what I am going to make of Piketty’s book but the notion that France’s SP will play any role in the “peaceful overcoming of capitalism” strikes me as absurd, and almost equally absurd is Shenk’s taking this claim seriously. Hadn’t he read the NY Times article dated April 11th on the party’s new leader?

On Tuesday, Mr. Valls offered the most detailed summary yet of how the government intends to meet its promise to enact $69 billion in spending cuts by 2017. He called for $26 billion in cuts to the central government bureaucracy, $13.8 billion to the national health care system and $13.8 billion to local governments — an element at which many legislators on the right booed loudly, having just won control of a number of local governments. He did not specify how the remaining $15.4 billion in cuts would be made.

One hopes that there was an equivalent of Jacobin in France raising hell about the country’s version of Obama no matter Shenk’s credulous take on the Socialist Party.

Finally, after a tsunami of words, Shenk gets to his real point in the concluding sentences:

Reflexive grasping at the language of the past, vividly displayed in the Marxist resurgence, brings a sense of order to what would seem like chaos. But a more promising alternative might be on the way. Marxism is one kind of socialism, but history suggests a much richer set of possibilities, along with some grounds for hope. So does a work like Capital in the Twenty-First Century—a sign that another lost tradition, the postcapitalist visions in abeyance since the 1970s, could be poised for a return; or, even better, that we might put aside old pieties and chart our own path.

Call me grasping reflexively at the language of the past, but history does not suggest a much richer set of possibilities to me. Instead I see a deepening of class conflict with the eventual renaissance of Marxism and the revolutionary socialist movement. I have been committed to that project for 47 years now and see nothing to change my mind at this point. With a nod to Piketty’s book, one that rejects socialism in favor of neo-Keynesian half-measures (I don’t have to read it to know that this is his outlook), Shenk makes clear why he is so fed up with those who live in the past. In my view, you have to live in the past to some degree if you want to live in the future. Capitalism, or whatever word you want to use, is destroying the planet no matter what The Nation and its hired guns would have you believe.

January 27, 2013

For as long as I have been reading Crooked Timber, a group blog hosted by liberal and social democratic academics, I don’t think a year has gone by without it being devoted to the proposition that Marxism is dead—something that has been heard from such circles going back to the days of Eugen Böhm-Bawerk. In an odd way, all this does is pay tribute to Marx’s relevance. You don’t, for example, find The Economist, The New York Review of Books, or the Financial Times publishing articles on “Henry George RIP”.

In 2012 the big “Marx is Dead” celebration there was held under the auspices of a seminar on “Red Plenty”, a novel by Francis Spufford that depicted the rather vainglorious notions of Soviet citizens in the 1950s—starting with Nikita Khrushchev—that soon the USSR economy would pump out more air conditioners and V-8 gas guzzlers than the US. It was Spufford’s intention to bring a knowing smile to the people who read it, just is the case with the audience for the cable TV hit show “Mad Men”. What this has to do with what Michael Lebowitz called “the full development of human potential” is anybody’s guess.

Since I am banned from commenting (depending on the mood of the moderation board on a given day), I refrained from the proceedings at Crooked Timber but offered my own commentary at the Unrepentant Marxist.

This year the first outbreak of “Marx is Dead” appeared on January 25th under an announcement by philosophy professor John Holbo that a cyberseminar on Erik Olin Wright’s “Envisioning Real Utopias” was kicking off soon.

Although I have major differences with Wright, I give him credit for engaging with me over his book. You can follow the debate over the book here:

4) You don’t get what you ask for. You get something else, and it’s terrible.

This pretty much epitomizes the formal logic that has dominated bourgeois thought since the very beginning. It simply can’t handle contradiction, a key element of Hegel’s dialectical approach that Marx appropriated and transformed in one fell swoop.

The problem is that formal logic is ill-equipped to handle motion, change, dynamic states, etc. Hence, it is nearly impossible to understand a revolution if you cannot accept that it can be a success and a failure at the same time.

I doubt that anybody on the Crooked Timber central committee has read Leon Trotsky–or having read him, understood what they were reading. I exclude Scott McLemee, who belonged to a Trotskyist sect long ago and most likely hooked up with the Timberites after becoming disillusioned with Marxism in the 1990s. From what I can gather, he has recovered nicely but remains on board with them although mostly on a formal basis.

When asked to describe the character of the USSR during its darkest days—the late 1930s—Trotsky refrained from putting a label on the state or facile categories such as “success” or “failure”. He wrote in “The Revolution Betrayed”:

The Soviet Union is a contradictory society halfway between capitalism and socialism, in which: (a) the productive forces are still far from adequate to give the state property a socialist character; (b) the tendency toward primitive accumulation created by want breaks out through innumerable pores of the planned economy; (c) norms of distribution preserving a bourgeois character lie at the basis of a new differentiation of society; (d) the economic growth, while slowly bettering the situation of the toilers, promotes a swift formation of privileged strata; (e) exploiting the social antagonisms, a bureaucracy has converted itself into an uncontrolled caste alien to socialism; (f) the social revolution, betrayed by the ruling party, still exists in property relations and in the consciousness of the toiling masses; (g) a further development of the accumulating contradictions can as well lead to socialism as back to capitalism; (h) on the road to capitalism the counterrevolution would have to break the resistance of the workers; (i) on the road to socialism the workers would have to overthrow the bureaucracy. In the last analysis, the question will be decided by a struggle of living social forces, both on the national and the world arena.

Doctrinaires will doubtless not be satisfied with this hypothetical definition. They would like categorical formulae: yes – yes, and no – no. Sociological problems would certainly be simpler, if social phenomena had always a finished character. There is nothing more dangerous, however, than to throw out of reality, for the sake of logical completeness, elements which today violate your scheme and tomorrow may wholly overturn it. In our analysis, we have above all avoided doing violence to dynamic social formations which have had no precedent and have no analogies. The scientific task, as well as the political, is not to give a finished definition to an unfinished process, but to follow all its stages, separate its progressive from its reactionary tendencies, expose their mutual relations, foresee possible variants of development, and find in this foresight a basis for action.

I guess the Timberites won’t be satisfied until they get “logical completeness” but history will continue to disappoint them.

But the most telling statement from Holbo is this: “A successful revolution that came off exactly as it was blueprinted would be a 10”. This betrays an utter inability to understand what Marx stood for, even though his article is meant to discredit Marxist thinking.

In the afterword to the second edition of Capital, volume one, Marx wrote:

That the method employed in “Das Kapital” has been little understood, is shown by the various conceptions, contradictory one to another, that have been formed of it.

Thus the Paris Revue Positiviste reproaches me in that, on the one hand, I treat economics metaphysically, and on the other hand — imagine! — confine myself to the mere critical analysis of actual facts, instead of writing recipes (Comtist ones?) for the cook-shops of the future.

Recipes for the cook-shops of the future…

No wonder Crooked Timber gives Erik Olin Wright the benefit of the doubt despite his life-long self-description as a Marxist. (Admittedly this is Analytical Marxism, something that may have about as much relationship to Marx as Eduard Bernstein—another self-described Marxist—had.)

By writing a book about the need for a return to Utopian thinking, Wright in essence was formulating recipes for the cook-shops of the future. Let me conclude with an excerpt from one of my articles linked to above:

Once he has dispensed with classical Marxist theory, Wright puts forward his new (“Wrightist”?) theory in chapter 4, titled “The Socialist Compass”. He starts off with the notion of a road map, but realizes that a compass is less rigid:

Instead of the metaphor of a road map guiding us to a known destination, the best we can probably do is to think of the project of emancipatory social change more like a voyage of exploration. We leave the well-known world with a compass that tells us the direction we are moving and an odometer which tells us how far from our point of departure we have traveled, but without a road map which lays out the entire route from the point of departure to the final destination. This has perils, of course: we may encounter chasms which we cannot cross, unforeseen obstacles which force us to move in a direction we had not planned. We may have to backtrack and try a new route.

Unfortunately, neither a road map nor a compass is the sort of metaphor that will be of much use to a socialist movement. Road maps and compasses are only useful when it comes to static realities, like a street, a lake, a rest stop, an ocean or a continent. Revolutionary politics defy any attempts to apply fixed categories since the ground is always shifting beneath your feet. Yesterday’s South might be tomorrow’s North. Indeed, there is absolutely no engagement in Wright with the social realities of present-day America, from the problems of immigrant labor to the decline of the trade union movement. It makes no sense of speaking about compasses to lead you in the direction of socialism while ignoring the pitfalls in your immediate path.

January 22, 2013

In January 2011, when I and my wife were on a month-long vacation in South Beach—a place that both of us love—we were pleasantly surprised to run into veteran socialists Ernie Tate and Jess MacKenzie who were staying only two doors away from us.

I did an interview with them that was supposed to be part of a longer video on “The Unrepentant Marxist Goes to South Beach” but for some reason I never pulled it altogether. I don’t tend to procrastinate but in this case things have slipped to the point where I decided to put up the interview with Ernie and Jess since it is just too good to get shelved any longer. After doing my interview with Beryl Rubens, a 90 year old CP’er who organized a trade union in my little village in the 1950s, I realized that there’s no greater calling than to get out the story of those who challenged the status quo in good times and bad.

Born in 1934, Ernie was a working-class Irish Protestant kid from Belfast who took a vacation in Paris in 1954 just after the French were defeated at Dien Bien Phu. The powerful demonstrations celebrating the victory organized by the CP were such an inspiration to him that he decided on the spot to become a communist.

Jess joined the movement in 1964 and before long found herself on a trip to Cuba that would put her in touch with Robert Williams, the NAACP leader who had organized a militia to defend African-Americans against Klan terror. She found herself functioning as a courier between Williams and his comrades in the U.S.

They relate their experience in the movement and offer some thoughts on why they remain socialists to this day. A very inspiring story.

Several months ago the Crooked Timber blog held a seminar on Francis Spufford’s “Red Plenty”, a novel that was widely embraced as a kind of postmortem on the USSR. The title refers to the apparently foolish beliefs of Soviet leaders, scientists and economists in the 1950s and 60s that “plenty”—in other words, consumer goods—could be achieved through central planning based on advanced computing technology.

Using a cast of characters both fictional and real (including Khrushchev), Spufford tries to capture the heady optimism of the post-WWII period, when both the USA and the USSR were experiencing rapid economic growth. In the first chapter, the representative character is Leonid Vitalevich Kantorovich, a real-life mathematician committed to introducing scientific methods into Soviet factories, in this instance a plywood factory to which he was attached:

The management wanted help tuning the orchestra up. To be honest, he couldn’t quite see what the machines were doing. He had only a vague idea of how plywood was actually manufactured. It somehow involved glue and sawdust, that was all he knew. It didn’t matter: for his purposes, he only needed to think of the machines as abstract propositions, each one effectively an equation in solid form, and immediately he read the letter he understood that the Plywood Trust, in its mathematical innocence, had sent him a classic example of a system of equations that was impossible to solve. There was a reason why factories around the world, capitalist or socialist, didn’t have a handy formula for these situations.

For Spufford, and for the social democrats and liberals who run Crooked Timber, economics is reduced to machinery and markets. The USSR failed because the bureaucracy rejected the advice of the mathematicians and computer scientists but more importantly because it relied on central planning in defiance of the wisdom of markets. As had supposedly been proven by Von Mises and Hayek, it was impossible for planning to work since it could not set prices accurately, nor could it provide resources—whether human, machine or raw material—to factories in a timely fashion. Of course, it would be unseemly for self-avowed leftists to openly pledge allegiance to the Austrian school. Instead they refer to Soviet and Eastern European economists who after becoming disillusioned with planning began to push for market solutions using language that could have been lifted out of a Von Mises or Hayek text, even though they had the supposed benediction of being a Marxist at some point in their career. While not quite nearly so bad as David Horowitz’s Front Page, the “god that failed” theme is fairly pervasive at Crooked Timber.

Sounding like someone who has joined Marxists Anonymous, John Quiggin, a member of the Crooked Timber moderation board and the author of the weak-tea Keynesian “Zombie Economics”, confesses at the start of his “Red Plenty or socialism without doctrines”: “I was once, like most of the characters in the book, a believer in central planning.

He is much wiser now, advising us: “Hayek and Mises had the better of the famous socialist calculation debate of the 1920s and 1930s.” In making his connection between the Austrians and Kornai, Quiggin writes:

In 1956, Kruschev [sic] makes his famous promise of overtaking the US, and it seems quite credible, but a decade later, all belief in the promise of plenty has been lost. As the book ends, the mathematical programmers charged with making the plan work are pushing the benefits of prices – some at least, like Janos Kornai, would complete the journey to the free-market right, and advocacy of the ‘shock therapy’ approach to post-Communist transition.

I doubt that Michael Lebowitz, the author of six books promoting the socialist alternative to capitalism, would have bothered taking part in Crooked Timber’s seminar even in the highly unlikely event that they would have invited someone to an event stacked even more in favor of bourgeois hegemony than a League of Women’s Voters presidential campaign debate. But if he had, I am sure that he would have come out on top.

August 27, 2012

Two days ago I received an email from Ed Leahy, a Marxmail subscriber:

I am a nascent Marxist and am now almost continually struggling against the general Capitalist ideological current that seems to have been internalized by pretty much everybody I know. I have found that the main argument they make for Capitalism is the ‘undeniable’ rise in living standards that has been engendered under a capitalist economy. I have been finding this a hard point to interrogate, as my own narrative is the same as theirs, i.e. the capitalist West has the highest standard of living, newly capitalist China is now lifting itself out of poverty etc. As a Marxist, how would you respond such a defense of Capitalism?

I first heard this argument back in a 8th grade social studies class in 1957 or so. We were being introduced to the theory of communism that went something like this. Back in the 1850s, kids, there was lots of poverty. Children your age worked in factories. Entire families lived in a one-room apartment without indoor plumbing. TB and other diseases were common in poor neighborhoods. When Karl Marx saw all this, he decided that capitalism was an evil system. He was not able to anticipate the ability of the system to create the kind of economic growth that your parents would be able to enjoy. (This was the time of split-level houses, Cadillac tail fins, winter vacations in Miami Beach, mom staying at home making chocolate cookies, and all the rest.)

After we got the lecture on how great the capitalist system was, the next topic was how rotten communism was. We were asked to read George Orwell’s “Animal Farm”. That’s what happens, kids, when you try to set up a classless society. The pigs will make your life miserable while they benefit from your labor. We got a big chuckle out of the line “All animals are equal, but some are more equal than others.” By my junior year in high school, I had begun to identify with the cultural avant-garde probably because I was too short to play basketball. When I heard that you could go to prison in Russia for painting like Jackson Pollack–that cinched it. Communism was definitely not for me.

One of the more interesting observations made on capitalism’s ability to survive and even create rapid economic growth can be found in Michael Lebowitz’s newly published “The Contradictions of Real Socialism”, the latest in a series of books he has written about 21st century socialism. Instead of the vulgar Marxist version of the system tottering on its last legs, Lebowitz makes the case that the system works in its own vicious fashion:

For many critics of capitalism, though, the system is on the verge of collapse. It is fragile—requiring for some only a cacophony of loud “No’s” or a resounding chorus of “silent farts” for it to crumble. For others, since capitalism is about to enter its final economic crisis (or, indeed, has been in it for decades), it is time to document the dying days of this doomed system. But for Marx, it was not so simple—capitalism was not fragile. Despite his hatred of a system that exploited and destroyed both human beings and nature, he understood that capitalism is strong and that it tends to create the conditions for its reproduction as a system.

If you want to read one of the more sophisticated defenses of the proposition that the capitalist system can “deliver the goods”, I recommend Berkeley economist Brad DeLong’s Understanding Marx, a lecture that commends Marx for certain insights but basically dismisses him on the same grounds as my 8th grade social studies teacher:

It looks as though Marx and Engels wrote the Manifesto–and made their permanent intellectual commitments–in 1848, at the nadir of living standards as far as British Lancashire textile workers were considered. Their assertion that wages declined as capitalism progressed looks good up until 1848 if you take Manchester as your guide. Thereafter it proved wrong. By 1880 manual workers were earning 40% more than in 1850.Parliament began to regulate conditions of employment in the 1840s. Parliament began to regulate public health in the 1850s. Parliament doubled the urban electorate in 1867, just as volume 1 of Capital was published. Parliament gave unions official sanction to bargain collectively in the 1870s.

Marx appears to have responded to this not by rethinking his opposition to markets as social allocation mechanisms or by reworking his analyses of the dynamics of economic growth, capital accumulation, and the real wage level, but by blaming British workers for not acting according to his model in response to predictions by Marx of continued impoverishment and ever-larger business cycles that had not come to pass. Boyer quotes Marx writing in 1878 about how British workers “had got to the point when [the British working class] was nothing more than the tail of the Great Liberal Party, i.e., of the oppressors, the capitalists.” And Boyer quotes Engels writing in 1894 of how “one is indeed driven to despair by these English workers… bourgeois ideas… viewpoints… narrow-mindedness…”

In 1916 Lenin wrote an article titled “Imperialism and the Split in Socialism” that contained this quote from Engels and others from Marx as well to explain why reformist leaders voted for war credits. Closely associated with this viewpoint is the notion that workers in countries like the U.S. and Britain constituted a “labor aristocracy” that was incapable of challenging the system because of the privileges it enjoyed. In the 1960s and 70s Maoist activists expanded on this theory in support of the notion that just as the country surrounded and eventually took control of the city in the Chinese Revolution, so would peasant nations surround industrialized nations in the final showdown with capitalism. Taken to its extreme, you get the SDS Weathermen dismissing workers as endowed with “white skin privilege” and constituting an obstacle to revolution.

Adopting Lenin’s 1916 article in a mechanical fashion could lead to a failure to understand the way in which a high standard of living in one period would be considered meager in another. If you took someone living in London in 2012 earning the average working class wage, put him or her in a time machine, and set the dial to 1916, they would feel impoverished. The same thing would apply for someone in 1916 being sent back to 1856. Poverty is constantly being redefined on the basis of society’s expectations. That is why revolutions are often bred not by absolute poverty but by the erosion of living standards. Syria’s economy was expanding fairly rapidly under Baathist rule but a combination of factors, including an increase in the cost of food staples, led to massive discontent. Ordinarily a government with mass support can survive such a crisis, as Cuba did after the end of Soviet support in the early 90s, but an iron-fisted dictatorship that has close ties to “crony capitalists” will not.

After WWII, the U.S. economy began to expand rapidly. For the leadership of the Trotskyist movement, the only possibility was a repeat of the 1930s—certainly by the early 1950s. They were the sort of people that Lebowitz referred to as believing that the system is always on the verge of collapse. One leader was not convinced of this. Felix Morrow, the author of an excellent book on the civil war in Spain, warned against a vulgar Marxism that could not see capitalism’s resiliency. I wrote about Morrow’s analysis about 12 years ago relying on an article by Peter Jenkins titled Where Trotskyism Got Lost: World War Two and the Prospect for Revolution in Europe. Fortunately that article is now online in the Trotskyist archives of MIA. Instead of doom and gloom, Morrow predicted improvements (quoting from Jenkins):

The short term perspective is that American imperialism will provide food and economic aid to Europe and will thus for a time appear before the European masses in a very different guise than German imperialism. This difference between the two great imperialisms aspiring to subjugate Europe is based on the difference in the economic resources of the two. The Nazis had nothing to offer to Europe; they had to subjugate Europe purely by means of military force, and after conquering each country, they had to plunder it of its food and other materials. The United States, on the other hand, will in the first instance enter the occupied countries of Europe ostensibly not as their conqueror but in the course of driving out the Nazis. Unlike Nazi occupation, American occupation will be followed by improvement in food supplies and in the economic situation generally. Where the Nazis removed factory machinery and transportation equipment the Americans will bring them in. These economic contrasts, which of course flow entirely from the contrast between the limited resources of German capitalism and the far more ample resources still possessed by American capitalism, cannot fail for a time to have political consequences.

Here was how I summed up the debate:

Morrow stood his ground against all attacks. He appeared as a heretic. One of the charges against him made by [Fourth International leader] Pierre Frank contained an interesting thought. If Morrow was right, what implications would this have for the world Trotskyist movement? Frank seemed to be thinking out loud when he said:

The false perspective of Morrow has a farther implication if it is really drawn to its logical end. If American imperialism has such inexhaustible powers that it can, as he thinks, improve the standard of living in Europe, then of course there exists a certain basis, on however low a foundation, for the establishment of bourgeois-democracy in the immediate period ahead. From that we must assume the softening of class conflicts for a period that the class struggle will be very largely refracted through the parliamentary struggle, that for a time the parliamentary arena will dominate the stage. If that were true, we would have to revise our conception of American imperialism. And of course the Trotskyist movement would have to attune its work to these new conditions — conditions for a while of slow painful growth, propaganda, election campaigns, etc., etc.

Frank’s fears were of course grounded in reality. This would be the fate of the Trotskyist movement and the rest of the left. The 1950s were not even a period of slow, painful growth, however. They were a period of decline. The FI only woke up to new realities when it shifted toward the student movement in the early 1960s. After a period of sustained growth, it returned to its “catastrophist” roots and proclaimed in 1975 that the workers were ready to launch an attack on capitalist power in the United States and the other industrialized countries. SWP leader Jack Barnes not only led this return to Comintern ultraleftism, he did the early communists one better and predicted war, fascism and proletarian revolution nearly every year or so for the last 20.

Although there were attempts by Trotskyist leaders to come to grips with the new realities, they were always boxed in by the need to convince the membership that revolution was coming in the not too distant future. When I joined in 1967, I was told that capitalism would generate an economic crisis but nobody could have anticipated back then that it would take just over 40 years for it to transpire. The capitalist crisis that is shaking the U.S. involves a lowering of the standard of living not unlike the one that has produced revolutions in the Middle East. So far, the only people to respond in a significant fashion have been the largely student and “informal economy” members who occupied Zuccotti Park and other public spaces. A massive attack on the working class standard of living has been taking place over the past 4 years at least, with public service unions on the front lines in Wisconsin.

It is difficult to predict the eventual outcome but the one thing we can be sure about is the incapacity of the system to produce the next wave of economic growth such as the one that occurred just around the time I was born. If you take into account that the economic upsurge was largely a function of the destruction of excess capital through bombs, bullets, grenades, and artillery shells, then the corollary is continued stagnation. Capitalism cannot survive another world war since it will be fought with atomic weapons, hence eliminating the possibility of the system being able to reproduce itself. We are left with Rosa Luxemburg’s famous counterposition: socialism or barbarism.

The World War confronts society with the choice: either continuation of capitalism, new wars, and imminent decline into chaos and anarchy, or abolition of capitalist exploitation.

With the conclusion of world war, the class rule of the bourgeoisie has forfeited its right to existence. It is no longer capable of leading society out of the terrible economic collapse which the imperialist orgy has left in its wake.

Means of production have been destroyed on a monstrous scale. Millions of able workers, the finest and strongest sons of the working class, slaughtered. Awaiting the survivors’ return stands the leering misery of unemployment. Famine and disease threaten to sap the strength of the people at its root. The financial bankruptcy of the state, due to the monstrous burdens of the war debt, is inevitable.

Out of all this bloody confusion, this yawning abyss, there is no help, no escape, no rescue other than socialism. Only the revolution of the world proletariat can bring order into this chaos, can bring work and bread for all, can end the reciprocal slaughter of the peoples, can restore peace, freedom, true culture to this martyred humanity. Down with the wage system! That is the slogan of the hour! Instead of wage labor and class rule there must be collective labor. The means of production must cease to be the monopoly of a single class; they must become the common property of all. No more exploiters and exploited! Planned production and distribution of the product in the common interest. Abolition not only of the contemporary mode of production, mere exploitation and robbery, but equally of contemporary commerce, mere fraud.

In place of the employers and their wage slaves, free working comrades! Labor as nobody’s torture, because everybody’s duty! A human and honorable life for all who do their social duty. Hunger no longer the curse of labor, but the scourge of idleness!

Only in such a society are national hatred and servitude uprooted. Only when such a society has become reality will the earth no more be stained by murder. Only then can it be said: This war was the last.

In this hour, socialism is the only salvation for humanity. The words of the Communist Manifesto flare like a fiery menetekel above the crumbling bastions of capitalist society: